There are several factors that often spark heady change in stock markets. You should definitely be aware about some of them before you take the plunge. The live stock market updates are often the best indicators of current market situations. However, there are some prevalent factors that have a big hand in determining overall behaviour of the market. Inflation is a huge aspect behind stock market spikes. In most cases, dollar value goes down and this does create quite a flutter in most global stock markets. Though inflation is seen as a positive sign over a long period of time owing to enhanced consumer spending and robust economical movements that are associated with it, consumers usually refrain from investing higher amounts for the short term. Owing to lower levels of spending, companies end up with substantially decreased profits which in turn, impact stock prices.
As per live stock market updates in such situations, investors sell off their shares in such companies owing to their predominant belief in the lower value of the same in these circumstances. As a result, demand for specific stocks wane over time and prices decrease as well. Whenever this situation is common for multiple big companies and stock market trailblazers, the entire market witnesses a down turn of sorts. Rates of interest are other predominant factors behind stock market changes and movements. As per most Reserve banking guidelines, interest rates of central funds can often be raised and this also signifies rates paid by banks on loans taken from the central or reserve bank.
In such a situation, banks have to fork out substantially higher rates of interest and this translates into a widespread rise in interest rates for loans provided to customers in addition to rates for credit cards. As a result, lower consumer spending is a natural occurrence in this scenario and this impacts most businesses with regard to growth and sluggish market borrowing. Live stock market updates usually show that companies register lower profits as a result and stock markets tend to collapse owing to decreased stock prices of market giants and frantic selling by investors.
